The Danish shipowner has written down the carrying amount of its owned dry cargo fleet by $180m and a provision for $160m of losses on its chartered in dry bulk fleet.
“The market values of dry cargo vessels and the forward rates for the coming years dropped drastically in the fourth quarter of 2015. At the end of the year, broker valuations of Norden’s owned vessels and newbuilding contracts including joint ventures and assets held for sale were $203m below the carrying amounts and cost prices of newbuildings, and Norden has therefore completed a routine impairment test,” the company said.
Norden is expecting a difficult two years ahead the market adjusts to lower demand from China and deals with the overcapacity in the dry bulk shipping fleet.
“On this basis, management expects continued weak rates on a level with the current FFA rates for the coming two years. After this period, the rates are expected to improve gradually,” it said.
As a result of the writedowns and provisions Norden now expects to report an EBIT loss of $297m - $277m for 2015 compared to previous expectations $43m - $63m EBIT profit.
Earlier this week Norden exiting shipowning in the capesize sector to focus on the supramax and panamax sectors. The company still has one chartered in capesize vessel.
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